>> HOTEL CLERK: Lord Keynes! Welcome, sir. It's a pleasure. >>KEYNES: The pleasure's all mine. >>CLERK: Your agenda — >>KEYNES: That won't be necessary. I am the agenda. >>CLERK: [laughs] >>KEYNES: Tell them I've arrived — >>HAYEK: And then tell them I've arrived. >>CLERK: And, your name is? >>HAYEK: Hayek. F.A. Hayek. With an "H". >>KEYNES: Freddy. (yeah) Keynes. Hey, listen, party at the Fed. >>HAYEK: Already? >>KEYNES: Twenty minutes. Lobby. John Maynard Keynes. F.A. Hayek. >>KEYNES: Yeah, we're opposed >>HAYEK: We oppose each other philosophically >>KEYNES: In the same studio We've been going back and forth for a century >>KEYNES: I want to steer markets >>HAYEK: I want them set free There's a boom and bust cycle, and good reason to fear it >>HAYEK: Blame low interest rates >>KEYNES: No... it's the animal spirits John Maynard Keynes wrote the book on modern macro The man you need when the economy's off track Depression, recession,Now your question's in session Have a seat and I'll school you in one simple lesson Boom! 1929: the big crash,We didn't bounce back, economy's in the trash Persistent unemployment, the result of sticky wages,Waiting for recovery? (Seriously?) That's outrageous I had a real plan any fool can understand,The advice real simple: boost aggregate demand! C, I, G, altogether gets to Y,Keep that total growing, watch the economy fly We've been going back and forth for a century >>KEYNES: I want to steer markets >>HAYEK: I want them set free There's a boom and bust cycle, and good reason to fear it. >>HAYEK: Blame low interest rates >>KEYNES: No... it's the animal spirits You see it's all about spending,Hear the register cha-ching Circular flow,The dough is everything So if that flow is getting low,It doesn't matter the reason We need more government spending,Now it's stimulus season So forget about saving,Get it straight out of your head Like I said, "In the long run, we're all dead" Savings is destruction, that's the paradox of thrift,Don't keep money in your pocket or that growth will never lift, because Business is driven by the animal spirits,The bull and the bear and there's reasons to fear It's effects on capital investment, income, and growth That's why the state should fill the gap, with stimulus both The monetary and the fiscal, they're equally correct Public works, digging ditches, war has the same effect Even a broken window helps the glass man have some wealth The multiplier driving higher the economy’s health And if the Central Bank’s interest rate policy tanks A liquidity trap, that new money’s stuck in the banks! Deficits could be the cure, you been looking for Let the spending soar, now that you know the score My General Theory’s made quite an impression [a revolution] I transformed the econ profession You know me, modesty, still I’m taking a bow Say it loud, say it proud, we’re all Keynesians now We’ve been goin’ back and forth for a century >>KEYNES: I want to steer markets,>>HAYEK: I want them set free There’s a boom and bust cycle and good reason to fear it >>KEYNES: I made my case, Freddie H Listen up , Can you hear it? >>HAYEK: I’ll begin in broad strokes, just like my friend Keynes His theory conceals the mechanics of change That simple equation, too much aggregation Ignores human action and motivation And yet it continues as a justification